Uranerz Energy Corporation: Powder River Basin Drilling to Commence; Surface Use Agreement Signed

Market Wire, June, 2006

Uranerz Energy Corporation ("Uranerz") (OTCBB: URNZ)(FWB: U9E) is pleased to announce the initiation of its 2006 drilling program. Uranerz plans to drill approximately 60 holes in the Powder River Basin area of Wyoming, covering four of its most advanced projects. Drilling permits have been received from the Wyoming Department of Environmental Quality and drill hole locations have been flagged on the ground. Support equipment has been mobilized to the first location and exploration drilling has commenced. The mobilization includes a drill rig with the capacity to test formations to a depth of up to 1500 feet, a backhoe, a water truck, and a logging unit. The drill plans can be adjusted depending upon the ongoing results of the program.

During the 2006 Wyoming exploration season, which typically runs from June through November, drilling is planned on the Hank, Nichols Ranch, Doughstick and Collins Draw projects, scheduled in that order. The drilling program this season will be conducted to both confirm known resources, as indicated in the Company's extensive historical data set that includes electric logs and drill hole maps, as well as to evaluate numerous known mineralized trends with the intent of delineating additional resources. Excellent infrastructure to support our drilling and electric logging operations is available from both Casper and Gillette, Wyoming.

Following the conclusion of the exploration effort in the Powder River Basin, plans are also being formulated to move the drilling equipment to the Great Divide Basin for Black Range Minerals to initiate drilling at Uranerz's Eagle and Cyclone Rim projects. Black Range Minerals recently signed a joint venture agreement to earn into these projects and will be responsible for managing and funding the Great Divide Basin part of the exploration program. All drilling this year in Wyoming is planned to confirm known uranium resources, and delineate additional uranium resources by drilling on oxidation-reduction fronts known to the Company.

Uranerz Energy is also pleased to announce that it has signed a Surface Owners Agreement with ranching operators and successfully negotiated access agreements on privately owned ground covering an area of approximately 48,000 acres in the Powder River Basin. These surface use agreements cover most of the area on which the Company has active projects.

Uranerz Energy Corporation is engaged in the acquisition, exploration and development of properties in the uranium sector. The Company's goal is to become a producer of uranium which will be utilized as fuel in the western world's nuclear electrical generating facilities. The Company has an experienced team of mining personnel, many of whom are former officers, senior management and employees of the original Uranerz Exploration and Mining Limited and related companies (the "Uranerz Group"). This team has direct experience in licensing, designing, constructing and operating underground, open-pit and in-situ leach uranium production facilities. The Company also has an advisory board that consists entirely of ex-Uranerz Group professionals. The Uranerz Group was acquired in 1998 by Cameco, the world's largest primary uranium producer.

Currently, Uranerz Energy Corporation has uranium properties in Saskatchewan (Canada), Mongolia and Wyoming (U.S.A.). The Canadian and Mongolian uranium properties are in the exploration stage and Uranerz has joint ventured these projects to other companies as a means of reducing its exploration risk. These projects are operated and funded by our joint venture partners. The Powder River Basin, Wyoming uranium properties are advanced, and the Company has initiated environmental licensing and mine planning for the development of two of these projects, with the possibility of adding a third property in the near future.

ON BEHALF OF THE BOARD

Glenn Catchpole, President and CEO

This Press Release may contain, in addition, to historical information, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on management's expectations and beliefs, and involve risks and uncertainties. These statements may involve known and unknown risks and uncertainties and other factors that may cause the actual results to be materially different from the results implied herein. Key factors that could cause actual results to differ materially from those described in forward-looking statements are:

(i) the inability of the Company to complete the acquisition of any interest in any new mineral exploration properties;

(ii) the inability of the Company to achieve the financing required to pursue the acquisition of exploration of any new mineral properties;

(iii) the inability of the Company to raise the financing necessary to conduct exploration or development of its properties; and

(iv) the lack of presence of commercial mineralization on its properties.